[atishay811]

Good for them in the short run. In the longer version of this, the company gets lazy with their fat margins and adds a lot of administrative cruft. A leaner competitor comes in and the entire system becomes history. Capitalism in action.

I don’t think anyone would miss the haggling at the car dealerships.

[mrandish]

I agree. This is (hopefully) only a brief resurgence (or perhaps 'last gasp') of the old-school U.S. auto industry new car distribution model pioneered by Detroit's 'Big Three' in the 1940s-50s. It worked reasonably well at the time but also perpetuated and institutionalized anti-competitive, anti-consumer practices.

Since the turn of the century the legacy Detroit distribution model has been blocking progress largely through crony political capture at the state level as evidenced by their ability to stop potential disruptors such as Tesla from competing with local distribution. Legacy car dealer associations are using their control of state legislatures to make competing with them illegal. In all except the largest metro areas, legacy car dealerships are usually the largest and most consistent political donors and local advertisers decade after decade. They wield tremendous influence over both local and regional politicians, media and editorial boards because they have more money (due to selling high-cost products) and their ability to coordinate in de facto cartels because the auto manufacturers only grant limited dealerships in a given area.

Leveraging their regulatory capture over state automotive sales laws is blocking new, smaller competitors from entering the market as well preventing the evolution of more efficient, consumer-centric distribution models. Sure, I can order a new car over the internet from an out of state company but that company is prevented by law from having a showroom near me where I could see the product before ordering. This has nothing to do with consumer protection and everything to do with crony protection of the most powerful regional business lobby.